What does an ASA really cost.

[medhead]

The cost of a point isn't only about what QFF charge their customers but also what type of customer YOU are, how you use/don't use points etc..
Kind of like a Value In and Value Out figure and QFF arbitrages on the difference potentially each day before you ever have a chance to use them. Once a point is 'created' into the QFF system - that same point has influence over many other factors in a way that that exact point can go up and down in value as it sits in your account.

For example let's say you have 72K points laying around you want to burn on your next SYD-LAX flight. You intentionally buy a higher class fare to get yourself into the system. In theory - part of the increased fare you purchased should be attributed to the points balance in your account and thus increasing their value to QFF.

As your status increases; the value of your points to QFF technically would decrease as you become more savvy on how to use them and you're much less likely to have them expire. On the flipside you likely become more valuable as a customer because you're flying more and earning more points (even though they're at lower value than a Bronze member).

Obviously there's likely hundreds if not thousands of possible combinations to this riddle as every financial institution's customers are different, the customers FF account they go into are different, as are spending, flying and overall influential values.

So how much is a point really worth/What does a ASA really cost?
I'm sure I could come up with a formula to show these metrics but we're talking super-geeky analyst territory now

The simple answer is that it's subjective!.

Unfortunately, or fortunately, I'm not super geeky. I have to stick to simple generalisations.

But agree there are a few things I haven't factored in. Margin achieved on any given point, is clearly the important number. I've simplified that to being represented by the cash in on selling a point. But as Jack3193 pointed out when raising the new Simpler Fairer earning, the long term numbers have just given me a moving average that is going to increase as more new flights get added.

 

[amaroo]

What does a ASA really cost?

Numbers for one of my recent ASA...

ASA - Assuming the worst case e.g. all the points I used cost me $0.0097/p (about 1/3 of my points cost ~$0.0000/p) the ASA cost 312,100 QFP (net 71,900 points earned, only SG at the time) + $2,200 .... worst case cost for me = $5,228 for 920SC. Therefore = $5.68 SC

Cash - The First Saver fare for a date in Apr 16 = $13,850 for 920SC. Therefore = $15.05 SC

If we assume the 312,100p were sold by QFF for $0.015 .... it works out to be $4,682 + $2,200 = $6,882 or $7.48 SC

For the ASA to be worth the same to QFF as a cash purchase - QFF would need to sell a point for > $0.037/p

 

[Jack_OC]

At a cost of $0.01 per point, $0.015 is only 50% higher.

Correct, but what's the relevance of that? You argued that QF must charge more than 0.7c ( possibly true), but you then went on to work on the assumption that they are charging 1.5c. My point is simply that 1.5c is 115% higher than 0.7c. That's a huge margin, as I said. Why do you assume their margin must be that high? This is absolutely central to the analysis in your first post. If you replace 1.5c in your original calculations with a lower number, it would completely change the conclusion you reached.

This thread has started as being about my travel with respect to the accusation that I'm a status cheat.

??? I haven't seen any such accusations, and I certainly haven't made any.

I would suggest looking at red-e-deal earning. As I pay for all of my flights, that is my earning region. It is certainly possible to get $79/$89/$99 airfares, even now on short domestic routes earning 10SC per flight. I was fairly consistently averaging $120 on a route earning 15SC just by forward planning and booking.

$79 fares are possible, but not typical, and even then the cost per SC is $7.90 - which is 10% more than your average. This highlights that your average is low. Again, my point is simply that on average, I think SCs earned via ASAs were a lot cheaper than on cash fares. But to avoid doubt - I'm not saying you or anyone else was "a cheat" for availing of cheap SCs - in fact I applaud anyone who makes the system work for them. Personally, I'll take any status and perks that I can.

I don't get what you're saying here, an SC costs $10. So on that MEL-SYD flight for $145, the 20 SC cost $200. :?: That doesn't seem correct.

You said your average cost of an SC is $7.27. A MEL-SYD rtn would have to cost $145 to make the cost per SC that low. I was saying a more reasonable estimate for the cost per SC on average would be at least $10 - ie assume an average MEL-SYD rtn would cost at least $200 (it's probably even higher - I was just giving an example).

 

[MEL_Traveller]

I dunno where this fits in to the above discussion - but let's not forget jetstar is buying SCs off QF loyalty and selling them to passengers for around $1.33 per SC.

Calculation based on a bundle over the business starter fare MEL-SIN which comes in at $200, less $40 of that for Qantas lounge access, leaving 120SCs for $160 cash paid.

One assumes JQ is taking a cut in the buy/sell process, so QF loyalty is probably selling the SCs for something less than $1.33 each.

 

[JohnK]

One assumes JQ is taking a cut in the buy/sell process, so QF loyalty is probably selling the SCs for something less than $1.33 each.

Well I am silly because my SCs with Qantas cost me ~$10/SC.

So how does Jetstar get away with giving away SCs that cheaply?

 

[amaroo]

I dunno where this fits in to the above discussion - but let's not forget jetstar

<snip>

Argh, the good old days. I was getting 40SC a week for ~ 4 years doing J* MCY-SYD-MCY

 

[MEL_Traveller]

Well I am silly because my SCs with Qantas cost me ~$10/SC.

So how does Jetstar get away with giving away SCs that cheaply?

Because that's the price QF Loyalty has decided makes them a profit. Otherwise they wouldn't do it (well - you have to assume that, they're not there to lose money).

That puts the net cost of gold status at about $600-700 a year (depending on attain/retain), and platinum about double that. Which is probably not far off in terms of lounge access pricing (considering the cost of a Qantas Club membership).

F lounge access is obviously more expensive... but... aside from the restaurant, reasonable hot food and things like champagne are already included in many other business class lounges around the world. QF chooses sparkling wine for its business class lounges.

If you attain platinum and take out the cost of Qantas club access (let's say $500), that leaves $700 for F lounge visits - which at $100 a visit is still quite a few. If you are flying on a business class ticket anyway, the incremental cost to access the F lounge (over and above the business class lounge entry already factored into the ticket) is even less.

 

[Jack_OC]

You can't just buy a Plus Bundle for $200 - you have to buy the starter fare first - which if I recall correctly costs about $1k. So you're getting 90 SCs for $1200, not $200, in that example.

 

[medhead]

Correct, but what's the relevance of that? You argued that QF must charge more than 0.7c ( possibly true), but you then went on to work on the assumption that they are charging 1.5c. My point is simply that 1.5c is 115% higher than 0.7c. That's a huge margin, as I said. Why do you assume their margin must be that high? This is absolutely central to the analysis in your first post. If you replace 1.5c in your original calculations with a lower number, it would completely change the conclusion you reached.

I've explained why I picked 1.5c. Because points are sold at a range of prices and much higher than that again. I also don't see why I'd use a lower number, certainly not based solely on your assumptions about one bank buying points for one card product.

But lets take the points factor out of it to some extent. A classic J award is 24000 + $36 on a particular domestic route. On that same route I purchased JASA at 24000 + $105 (once) to $140-ish (on most flights). One way, in both case. So the JASA was gaining $70 to $100 extra for Qantas. They handed out 1813 points, assume you don't mind using 1.5c/point - $27. So QF was getting an extra $43 to $73 for the 60 SC. $0.6 to $1.2 /SC. Right in the JQ bundle region mentioned in thread. I just don't see the JASA price being inconsistently low.

$79 fares are possible, but not typical, and even then the cost per SC is $7.90 - which is 10% more than your average. This highlights that your average is low. Again, my point is simply that on average, I think SCs earned via ASAs were a lot cheaper than on cash fares. But to avoid doubt - I'm not saying you or anyone else was "a cheat" for availing of cheap SCs - in fact I applaud anyone who makes the system work for them. Personally, I'll take any status and perks that I can.

You said your average cost of an SC is $7.27. A MEL-SYD rtn would have to cost $145 to make the cost per SC that low. I was saying a more reasonable estimate for the cost per SC on average would be at least $10 - ie assume an average MEL-SYD rtn would cost at least $200 (it's probably even higher - I was just giving an example).

I've started from my purchasing experience. It is entirely possible to get the cheap fares for most of the year, even on christmas eve. Again in my experience. In my case ADL/SYD average pricing $120 to $130 for 15SC earn. That earn has decreased to 10SC. But on other routes careful planning should result in most fares around $70 to $80. Most people around here try to achieve less than $10 per SC. While there are heaps of fares that are $10 to $20 to $30 per SC, that doesn't mean <$10 per SC is unreasonable or unachievable. QF are presumably happy for me to book 120 cheap red-e-deals to retain platinum.

The other thing is that if we compare to some of the status run numbers that get thrown around at $2 to $3 per SC. Or even the $3 to $4 that I've found in Asia. Surely $7/SC is looking pretty good. What value will QF get from me buying 2000SC at $4/SC on other airlines?

BTW, sorry for the rant. I'm not saying you've made an accusation. That was just as explanation as to why I'm focussing on my numbers.

You can't just buy a Plus Bundle for $200 - you have to buy the starter fare first - which if I recall correctly costs about $1k. So you're getting 90 SCs for $1200, not $200, in that example.

The plus/max bundle pricing informs the value of SC that are earned on top of a base fare. It's a pretty good analogy to classic awards (the starter fare) and ASA (starter fare plus bundle).

Anyway, it's just one price signal from Qantas group about the value of these things.

 

[Jack_OC]

The bottom line is - you asked in the title of the thread, what does an ASA really cost? The answer is, none of us know what an ASA cost Qantas. You can take a guess and conclude QF made as much from ASAs as they do from cash fares. Or you can make different assumptions and conclude that ASAs were a great deal for the consumer but not so much for Qantas.

I strongly suspect the latter is true. The fact that Qantas decided to scrap ASAs suggests they came to the same conclusion.

 

[medhead]

The bottom line is - you asked in the title of the thread, what does an ASA really cost? The answer is, none of us know what an ASA cost Qantas. You can take a guess and conclude QF made as much from ASAs as they do from cash fares. Or you can make different assumptions and conclude that ASAs were a great deal for the consumer but not so much for Qantas.

I strongly suspect the latter is true. The fact that Qantas decided to scrap ASAs suggests they came to the same conclusion.

The thread title asks what ASA cost the customer, that is the main question posed. I do know what an ASA really cost me. No need to guess that one.
If we want to take your interpretation, I can also assess what I paid for an ASA and compare that to what I pay for equivalent products. I think that's been done in thread as well. Presumably because Qantas keep offering these other products we can assume they're happy with the return. :?:

Not sure where you're getting this idea about making as much from cash fares as from ASA. The numbers I've give are about the cost to me, not Qantas. Do we assume that classic awards make as much as cash fares because Qantas still offers classic awards?

Anyway, these thread is suppose to address the cost issue if an objective way to address the wild claims that people where getting cheap status, cheating the system and ripping off poor Qantas. This is not supposed to be about reasons for removal or arguments for re-instatement of ASA. Thanks for telling me I'm wrong. I don't see many hard numbers to back up that position. But great to know your feelings.

 

[basso]

I dunno where this fits in to the above discussion - but let's not forget jetstar is buying SCs off QF loyalty and selling them to passengers for around $1.33 per SC.

Actually, I am not sure that SC are actually bought or sold. They would be buying the points.

 

[ozbeachbabe]

So if someone who is PS and sitting on 420SC then got a DSC and did one JASA DRW/xBNE/TSV for 140SC which earned 280SC thereby reaching the 700SC required to reach SG, does that make them a 'freeloader' or is it 'rorting the system' too or does that label only apply to newly annointed WP or P1 pax?

A SG still gets lounge access like WP (albeit slightly different ones but lounge access nevertheless), domestically they get an identical baggage allowance of 2pc @ 32kg or 3pc @ 32kg to the USA plus can access One World lounges overseas so unless I'm missing something the only extra it's costing the airline for someone to be WP (versus SG) is 25% more in status bonus points.

 

[MEL_Traveller]

Actually, I am not sure that SC are actually bought or sold. They would be buying the points.

Actually that's a goof point. Out of the $200 bundle... take off $40 lounge access, and another $40 odd for the points themselves... brings the SCs down to about $1 each.

Are they for sale? I would have though everything has a cost in the FF loyalty program?

 

[basso]

I That means QF has got $12226 out of me for the JASA I've taken. That works out at a cost of $7.19/SC on the JASA flights. l.

Actually they've got $3,127 cash out of you and you've got what you calculate to be $12,226 worth of flights, with the balance coming from points. This is quite a different equation to that $12,226 coming out of your pocket.

 

[dfcatch]

I'm fed up with continually being branded a petulant child, who was cheating on ASA to abuse the status system.

Oh come on Medhead

You know that you're not a petulant child for that! Now - what were you saying about the Carbon Tax lol j/k

But - Medhead - you of all people should know that you're clearly not as loyal as those who fly J/F on someone else's dime.

Because of course - if their employer suddenly switched to flying them in F on another airline (say SQ or EY), clearly they would refuse because they are "more loyal to QF than you".

I think that's why they call you a petulant child



On a more serious note - the idiots aside - I think the ONLY legitimate argument around mASAs was the fact that a Frequent Spender or Frequent BAS Payer could out-achieve the status of a real BIS FF without the BIS commitment. And of course there were those who screamed the loudest at any suggestion that increasing the squiggle requirement would help ensure only FFs (on their home program) achieved top level status.

 

[dfcatch]

Actually, I am not sure that SC are actually bought or sold. They would be buying the points.

SCs are not free.

 

[Jack_OC]

Not sure where you're getting this idea about making as much from cash fares as from ASA. The numbers I've give are about the cost to me, not Qantas.

I was simply responding to what you wrote in the opening post in the thread!

That means QF has got $12226 out of me for the JASA I've taken. That works out at a cost of $7.19/SC on the JASA flights.

On all my flights on QF I've paid $7.27/SC. For QFF SC earning across all airlines $7.31/SC.

Oh gee look at that, I've paid Qantas about the same for JASA as I have for normal cash flight.

My points are quite simple.

1. I don't think what you paid Qantas for a JASA was anything like what you typically pay for a normal cash flight, because I think your assumed cost of a point is too high.

2. What you paid Qantas for a JASA is almost certainly way less than what the average customer typically pays for a normal cash flight, because IME, the average cost of an SC on a cash fare is way higher than your average of $7.27.

In other words, your analysis doesn't disprove the theory that JASAs were a means to get cheap SCs. For me it does the opposite. But just to repeat, I see nothing wrong with getting as many cheap SCs as you can.

 

[dfcatch]

Actually they've got $3,127 cash out of you and you've got what you calculate to be $12,226 worth of flights, with the balance coming from points. This is quite a different equation to that $12,226 coming out of your pocket.

Nope.

QF assigns a value per point. The legitimate question revolved around the Internal Cost of Redemption.

The equation is fair - you can apply a much more conservative figure if you like.

What is not in question - is that QF received from those JASAs EXACTLY the points-value-currency that they wanted for that seat as a Classic Award together with a co-pay that was HIGHER as a JASA than a Classic Redemption, which goes toward compensating QF for the points/SCs.

 

[dfcatch]

I was simply responding to what you wrote in the opening post in the thread!



My points are quite simple.

1. I don't think what you paid Qantas for a JASA was anything like what you typically pay for a normal cash flight, because I think your assumed cost of a point is too high.

2. What you paid Qantas for a JASA is almost certainly way less than what the average customer typically pays for a normal cash flight, because IME, the average cost of an SC on a cash fare is way higher than your average of $7.27.

In other words, your analysis doesn't disprove the theory that JASAs were a means to get cheap SCs. For me it does the opposite. But just to repeat, I see nothing wrong with getting as many cheap SCs as you can.

1/ The comparison against a Cash flight is wrong. The comparison is against a Classic Award - any other comparison is flawed. If he didn't redeem the JASA, Medhead likely would have redeemed either a Classic Award, or purchased a Red-eDeal.

2/ Again - you can't compare against a Cash fare. (Unless Medhead was otherwise going to buy a revenue J fare AND was going to IGNORE the availability of the Classic Award on the same flight).

3/ You CAN ask the question regarding the internal cost of provision of SCs/points. But the reality is that if Medhead wanted to do a Status Run - he could have done so on a cash fare (without a mASA) for less than $7.27/SC.